DEPUTY DIRECTOR-GENERAL ALAN WM. WOLFF
2020 was a difficult year. It added an unprecedented health crisis, with consequent supply and demand complications, to the list of challenges faced by agricultural producers, including extreme weather patterns, pests and diseases, geopolitical tensions, and an increasing global population which needs to be adequately fed. It is estimated that global GDP declined by 4.2%(1), one of the largest declines in recent decades, plunging millions of people into poverty and undermining global efforts to meet the Sustainable Development Goals by 2030.
The COVID-19 pandemic has, however, highlighted the extraordinary resilience of agricultural production and trade. They performed very well, especially when compared to trade and production in other sectors. This was owed largely to the essential nature of food and to the role of trade in feeding the world's peoples.
There are a few key lessons from the pandemic that should be borne in mind for the future by policymakers:
First, keep markets open. This is essential, not only for food products, but also for other goods and services. Food should always be able to travel across borders. One in every 6 people in the world depends almost entirely on international trade to be fed. That is 17% of humanity or 1.3 billion people. Over 30 countries rely on imported food to avoid starvation. This reliance on international trade for food security is likely to grow. Imposing trade restrictions could have severe negative ramifications. Sustainable agricultural production cannot take place without keeping trade flowing for many other goods and services, such as fertilizers, tractors, drones, and sophisticated climate-smart equipment.
Second, invest wisely: Governments and central banks around the world have put in place fiscal packages worth trillions of dollars(2), and subsidies to farmers have proliferated. This is entirely understandable. Nevertheless, production-distorting support and subsidy competition should be avoided. Scarce fiscal resources should be invested in innovation and sustainability to “build back better”. Guaranteeing the food security of today's generation and of future generations are both essential. All policy measures, including subsidies, to address the effects of COVID-19 must be “targeted, proportionate, transparent and [especially] temporary”. Governments should promptly review their measures to determine if they are still necessary.
Third, assure transparency: Agricultural markets have shown remarkable resilience, but markets work even better with good quality, timely information including with respect to policy measures adopted by governments around the globe. Initiatives such as the Agriculture Market Information System (AMIS) are crucial for well-informed policy responses.
WTO negotiations would greatly benefit the agricultural sector and support sustainable economic recovery:
First, WTO Members will need to continuously update agricultural trade rules to meet current and future challenges and enhance the predictability of the global food supply. These efforts must: substantially reduce trade-distorting support; improve disciplines on export restrictions; enhance market access opportunities; and further improve export competition rules. In this respect, I welcome the pledge this week of WTO members accounting for most of world agricultural exports to refrain from imposing export restrictions on foodstuffs purchased by the World Food Programme for non-commercial humanitarian purposes.
Second, WTO Members must focus on trade and sustainability. During the WTO Trade and Environment week in November 2020, two new initiatives were launched: 50 Members started “structured discussions” on trade and environmental sustainability, while another group of Members held the first meeting of the informal dialogue on plastic pollution and sustainable plastics. An immediate environmental contribution would be concluding an agreement to curb harmful fisheries subsidies at or before the next WTO Ministerial Conference later this year.
Third, global digital commerce must become rules-based. Advancing the discussions on e-commerce to a successful conclusion would help farmers to benefit more fully from the global digital economy.
Agriculture Ministers can make a major difference in shaping the world trading system. They can and must work closely with their trade counterparts to advance the WTO negotiations to create a sustainable level playing field that would provide opportunities to all farmers and strengthen the ability of the agricultural sector to meet current and future challenges. 2021 must be a year of renewal for the world economy and for the trading system that is essential to the well-being of all peoples.
- https://www.oecd.org/economic-outlook/, December 2020. back to text
- In July, the OECD and G20 countries had responded with a stimulus packages estimated at over $11 trillion, approximately 10 percent of world GDP (https://www.cgdev.org/blog/price-inaction-during-covid-19-crisis). In November, according to some sources this amount neared $19.5 trillion (https://edition.cnn.com). back to text